To restrict the investing public to certain securities and not others is illegal and discriminatory. It is Un-American! This is the Land of the Free, isnít it? We should be able to invest in anything we want to invest in. Just like you canít keep someone from making bad investment decisions in stocks or mutual funds, you canít keep them from making bad investment decisions in alternative investments.

The SECís job is to prevent fraud and that is where your efforts should continue to be directed. The SEC does a lot in the anti-fraud area and you should keep it just at that. It is not your role to limit the decisions "free people" - investors large and small - can make in their pursuit of happiness through investing for their retirements. It is their choice, not yours!

I am a spec builder and I routinely put all my assets on the line with large loans from banks. Thank goodness there is no SEC in the real estate world! I would not have been able to build my net worth the way that I did. Most people who fall under the proposed limits are savvy and smart investors, who have been saving their pennies and investing. They are in a lower income bracket and will never amass wealth. Compare these hard working and smart people with the supposedly smart guy who inherits 5 million in cash and who has no idea what money is. According to the SEC this 5 million dollar guy is a sophisticated investor?

Letís sum it up:

- It is not your job to limit investing choices, let the public decide what they want to invest in

- It is not your job to limit what investment advisors can charge, let the public decide that with their investments.

- It IS your job to prevent fraud.

Hence: Create two classes of hedge funds. Keep the one that exists already and add a new class that is open to the public.

Those hedge funds open to everyone should be extremely accountable and would have to report their positions according to the mutual fund rules of disclosure of positions (or similar). I am sure that you will come up with other restrictions that will assist in preventing fraud in this class.

Those hedge funds who want to remain in the current ďprivate spaceĒ should still be held to their current restrictions but not the proposed restriction. People with more money are NOT necessarily smarter. Focus on how to prevent fraud not on how to restrict people from investing. Those with more funds available to invest are not really less impacted by a loss than those who have accumulated a lower level of savings. It is all about the percentage of their assets they invest. Are you going to make a rule that says you cannot invest more than x percent of your capital in any venture or investment? You canít, because it is a free country and includes your personal freedom to lose what you earned or inherited.

The SEC should focus on how to make hedge fund operators accountable for their results and methods. An investment loss is just that, regrettable but not unavoidable. It goes with the territory Ė that is just what investing is like. However, a loss due to fraud, a malicious action with intent, that should be fought very hard. Regulate the funds, not the investor!

Regards,

Wouter van Tiel

High risk entrepreneur in spec building custom homes. Routinely has over 100% of personal assets at risk. Free to chose a project as there is no SEC to tell me what I build. The market tells me what it wants and what I can charge for it Ė just like it should be!